Best Residential solar Power System
Your guide to going solar in Arizona
We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in Arizona. Since there's a lot of important information to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
The is all about the various financial options you have in Arizona. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.
The contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in Arizona. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.
Finally, the lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what Arizona is doing to make solar more affordable for its citizens, you'll find it here.We hope you find our work useful. If so, please help us keep our research and advocacy as strong as possible by sharing it with someone who might also find it interesting, contributing any amount you can, and by getting yourself personalized savings estimates from our trusted partner network.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
Your Solar Strategy in Arizona
Figuring out the best way to go solar in Arizona can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
Compare the Return of Different Solar Investments in Arizona
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. The good news in Arizona is you're choosing the best of three very good options, with savings that stack up to huge piles over the life of each of the three options.
As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you take a home equity line of credit (HELOC), though, your payments over 15 years will be a little more than your savings, but you'll still come out ahead in the end.
The last option is for a solar PPA, or power-purchase agreement, which means you put $0 down on a rooftop solar system and get electricity savings by paying less for the solar energy than you would for dirty power from APS. PPAs can be a good option if you don't have any equity or cash to put down, because they'll still save you money in the long run.
Read on to find out more about each option.
Net Present Value of Solar in Arizona
“Net Present What?!” Don’t panic, this isn’t an economics test. NPV is just a tool used to compare investments. Basically, it asks, “if you had X dollars to invest, which investment would get you the best return?” It relies on the idea that getting a return on your investment sooner is better than later, because you can reinvest your early profits and keep the gain train going.
We compare an investment in solar to a “what-if” investment in a Standard & Poor’s (S&P) 500 stock index fund, which has seen growth of about 7% per year over the past 25 years. We use the cost of solar in Arizona and ask “how much better or worse (in 2017 dollars) is an investment in solar than stocks?” Here's what we found for the three different ways of going solar in Arizona:
Look at all that green! A solar investment in Arizona should provide a better return than the stock market whether you choose a PPA, a loan, or pay up front. Here's some more about how we got these numbers:
Solar PPA NPV: $2, 295
Saving money without having to put anything down is always going to have a positive NPV. In Arizona, you’ll save $3, 766 over a 20 year contract, which is worth $2, 295 in today’s dollars. .
Solar Loan NPV: $5, 837
As we’re fond of saying, taking a loan for solar is a no-brainer, because it’s like agreeing to pay over time for something that is also making you money, plus you get 30% of the loan value as a tax credit (cash in your pocket) after making payments for only 1 year. In the case of Arizona, that tax credit windfall helps push the NPV of a solar loan to $5, 837 better than a similar investment in the stock market. That's a huge amount of upside for a $0-down investment!
Solar Purchase NPV: $2, 724
The biggest reason a solar purchase in Arizona has a positive NPV is it allows you to recoup 30% of that investment within 1 year, and reinvest that amount in whatever you choose. On top of that, the money you save on electricity is also available for future investment. But you can see above what happens to NPV if you choose a solar loan instead. It’s a much smarter way to pay for solar panels.